Correlation Between Ampleforth and Lundin Gold
Can any of the company-specific risk be diversified away by investing in both Ampleforth and Lundin Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ampleforth and Lundin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampleforth and Lundin Gold, you can compare the effects of market volatilities on Ampleforth and Lundin Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ampleforth with a short position of Lundin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampleforth and Lundin Gold.
Diversification Opportunities for Ampleforth and Lundin Gold
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ampleforth and Lundin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ampleforth and Lundin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Gold and Ampleforth is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ampleforth are associated (or correlated) with Lundin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Gold has no effect on the direction of Ampleforth i.e., Ampleforth and Lundin Gold go up and down completely randomly.
Pair Corralation between Ampleforth and Lundin Gold
Assuming the 90 days trading horizon Ampleforth is expected to generate 1.24 times less return on investment than Lundin Gold. In addition to that, Ampleforth is 2.26 times more volatile than Lundin Gold. It trades about 0.03 of its total potential returns per unit of risk. Lundin Gold is currently generating about 0.09 per unit of volatility. If you would invest 872.00 in Lundin Gold on September 4, 2024 and sell it today you would earn a total of 1,488 from holding Lundin Gold or generate 170.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 60.4% |
| Values | Daily Returns |
Ampleforth vs. Lundin Gold
Performance |
| Timeline |
| Ampleforth |
| Lundin Gold |
Ampleforth and Lundin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampleforth and Lundin Gold
The main advantage of trading using opposite Ampleforth and Lundin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampleforth position performs unexpectedly, Lundin Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lundin Gold will offset losses from the drop in Lundin Gold's long position.The idea behind Ampleforth and Lundin Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lundin Gold vs. Sirios Resources | Lundin Gold vs. Q2 Metals Corp | Lundin Gold vs. Tectonic Metals | Lundin Gold vs. Angus Gold |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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